The Czech Republic’s government, led by Prime Minister Petro Fiala, is on the brink of unveiling a revised draft of the state budget for the upcoming year, signaling significant changes in the salaries and workforce of civil servants. The proposed plan includes a freeze on the salaries of most civil servants, encompassing police officers, firefighters, soldiers, and other government employees, except for teachers who are slated to receive a pay increase. Finance Minister Zbyněk Stanjura has even proposed a more substantial reduction involving the elimination of tens of thousands of positions.

Initially, there were discussions of a 5% salary reduction, but this idea was subsequently abandoned. Instead, the government has announced its intention to reduce salary expenses by 2% in the coming year. Stefan Fous, the Finance Ministry’s spokesperson, confirmed this decision, stating, “As part of the upcoming budget for 2024, we are currently preparing the streamlining of service and work positions for the next calendar year, in line with the commitment to reduce salary expenses by 2% from the consolidation package.”

Recent reports from Czech Television indicate a notable shift in the updated version of the draft state budget. It now outlines a reduction of CZK 8.5 billion, which is more than 3% of salary expenditures, and a cut of twenty-one thousand state employees.

Government spokesman Václav Smolka emphasized that streamlining state administration is a top priority for the Petro Fiala government. This cost reduction effort will be reflected in next year’s budget, which is currently under government discussion.

While the finance ministry has submitted the proposal for government approval, specific details are yet to be provided. Fous stated, “The final form of the budget will be publicly presented only after the government’s approval, which is expected to discuss the budget at its meeting on 27 September.”

Spokespeople from other ministries have also refrained from commenting on the situation. However, the draft budget indicates that significant funding will be directed primarily to the defense ministry, as the government aims to meet the requirement of spending at least 2% of GDP on defense, especially given the situation in Ukraine. Officials at the Ministry of Labor and Social Affairs (MPSV) are also preparing for changes, as the ministry is considering layoffs, which may result in redistributing earnings among remaining employees. Stanjura has previously stated that the focus is on reducing the number of civil servants rather than their salaries, although some may see pay increases. The state intends to eliminate expenses related to vacant positions.

Media reports suggest dissatisfaction among representatives of the Pirates and the STAN movement, whose ministries are most affected by these changes. Earlier discussions involved the Education Ministry and the Interior Ministry, which oversees police officers and firefighters. Vladimír Vlček, director-general of the Czech Fire and Rescue Service, expressed concerns about the freeze on the recruitment of new firefighters.

Interior Minister Vít Rakušan (STAN) indicated his intention to maintain current funding levels, stating, “I am now setting myself a realistic ambition that corresponds to the state of public finances. This year we increased it, next year we don’t want to decrease it, even by a crown.”

Notably, this stance doesn’t sit well with Shadow Interior Minister Jana Mračková Vildumetzová, who criticized the lack of follow-through on earlier promises to increase salaries for police officers and firefighters. She emphasized the need for consistency in fulfilling commitments to these essential personnel.

This marks the third iteration of the government’s plan regarding salaries and workforce numbers. Initially, they proposed a 5% salary reduction due to public finance concerns, but this was later revised to 2%. According to political scientist Roman Chytilek of Masaryk University in Brno, Fiala’s government maintains its overarching intention, and the key will be the specific rationale and extent of the measures, which may not necessarily result in salary freezes but rather increased pressure on the state to streamline its operations.

Article by Prague Forum